China robot market growth to slump this year as trade war weighs (updated)

YASKAWA Electric

18/10/2018 08:56

(Recasts top with Chinese market forecast)
    TOKYO, Oct 18 (Reuters) - Sales of industrial robots in
China, the world's biggest market, will grow this year at only
about a third of last year as an escalating Sino-U.S. trade war
hits spending on equipment, a global robot group said on
Thursday.
    The International Federation of Robotics (IFR) in its annual
report forecast Chinese demand for robots will grow 15-20
percent this year after surging 59 percent to 137,920 units last
year.
    With China accounting for 36 percent of the global robot
market and with its sales volume exceeding the total of Europe
and the Americas combined, slowing demand growth in the Asian
nation is also impacting global demand.
    IFR, which brings together nearly 60 global robot suppliers
and integrators, predicts worldwide industrial robot sales this
year will grow 10 percent compared to last year's 30 percent.
    Because of the trade war, many global manufacturers "are now
in a wait-and-see mode, wondering whether to shift production
(away from China) to, let's say, Vietnam or the United States,"
IFR President Junji Tsuda told Reuters in an interview.
    China's robot market benefited last year from accelerated
automation at smartphone and automobile plants. Foreign
suppliers, mainly European and Japanese robot makers, accounted
for 75 percent of robot sales in China, including those produced
locally.
    "In the beginning of 2018, the demand for robots from China
lost impetus compared to the huge increase of sales in the first
half of 2017," the IFR said in its report.
    Tsuda, also the chairman of Japan's Yaskawa Electric Corp
 6506.T , said the manufacturers would move out of the
wait-and-see mode by the end of this year.
    It will take a while for the direction of the trade war to
be clear, Tsuda said. "But global demand for smartphones,
semiconductors and autos have been solid, and the time will
eventually come that they can wait no longer and will resume
investment to meet the demand."
    Yaskawa, one of the world's top robot manufacturers, last
week cut its annual operating profit forecast to 59 billion yen
($524.40 million) from 65.5 billion yen, citing a slowdown in
smartphone-related demand in China and growing caution over the
trade dispute.
    From next year onwards, however, IFR expects the global
robot market growth to pick up again, forecasting an average 14
percent increase per year through 2021.
    Renewed fears of a broadening economic impact from the trade
conflict sent China's benchmark stock index  .SSEC  to four-year
lows on Thursday, dragging down shares of Yaskawa, Fanuc Corp
 6954.T  and other Asian companies with large Chinese market
exposure.  urn:newsml:reuters.com:*:nL3N1WY22T
    Shares of Yaskawa closed down 7.8 percent and Fanuc fell 4.1
percent on the Tokyo Stock Exchange.  
($1 = 112.5100 yen)

 (Reporting by Makiko Yamazaki; Editing by Muralikumar
Anantharaman)
 ((Makiko.Yamazaki@thomsonreuters.com; 81-3-6441-1039;))